Bankruptcy 101: Basic Bankruptcy Information

Bankruptcy is often an option for individuals, a small business, or a multi-million dollar corporation to help them ease the paying of unimaginable multiple debts. In 2006, more than 2 million people in the United States filed for bankruptcy. Bankruptcy is a legal process presided over by federal law to permit individuals and businesses to legally reduce, restructure, or completely wipe out their debts, provided they meet stringent and specific requirements.

Thinking of when to file bankruptcy is not really the first question you should ask yourself. Rather, you should first ask if there is a need to file bankruptcy at all. The concept of filing one is usually to wipe out debts or stop harassment from collectors so you could live a life free of debt.

One should not use bankruptcy indiscriminately for there are unseen and long-lasting effects. Your credits can be ruined, and you may even have the trouble of getting bank accounts, credit cards, and insurance. Even the chances of getting hired for a job are affected because of the bankruptcy status.

If you are planning to file for bankruptcy, you should consider getting the help of a bankruptcy lawyer. Finance professionals suggest that you should assess your financial situation before filing for bankruptcy because credit counseling and other options may be required because of the new bankruptcy act of 2005. Bankruptcy lawyers can help you get familiar with Utah bankruptcy laws.

The bankruptcy proceeding is supervised by and litigated in the United States Bankruptcy Courts. America has several bankruptcy codes and it is very strict regarding bankruptcy. These codes can be very confusing because it deals with all of the many different classes of bankruptcy that anyone can file. It is recommended that you hire bankruptcy attorneys because they can decide which chapter of the Utah bankruptcy law best fits the situation.

The three main chapters of Utah bankruptcy laws are the 7th, 11th, and 13th. Most cases are filed under Chapter 7 because it allows individuals to eliminate much of their debt by liquidating non-exempt properties to repay creditors. Chapter 13 permits individuals to keep all of their property, but are required to pay all or a portion of their debts over a set time period which normally lasts for three to five years.